Geopolitical issues pose the “biggest challenge” to economic growth in the Middle East, while high inflation and energy prices weigh on energy-importing nations in the region, Qatar’s Finance Minister said on Tuesday.
High interest rates and a stronger US dollar were a challenge for the whole region, particularly for private businesses, Ali Al Kuwari told the Qatar Economic Forum in Doha.
“The geopolitical [issues] … I think this is maybe [our] biggest challenge as we go along. We see an unrest [in the] region, the war in Gaza [and] we have some civil unrest in Yemen and Sudan.
“These are imposing some difficulties on the routes and the logistics, and it's having some economic impact. There’s a possibility of [it] escalating, which is going to be a bigger challenge for us."
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Activists and students take part in an encampment protest at George Washington University, in Washington. AFP -
Students and faculty of Drexel University and University of Pennsylvania erect an encapment to protest against the war in Gaza, at the University of Pennsylvania campus, in Philadelphia. AFP -
Columbia University students continue their demonstration on campus afterlast week's arrest of more than 100 protesters, in New York City. Getty Images -
Police watch as students and faculty show support at a Protect Palestine Rally at the University of Texas, in Austin. EPA -
A student is arrested during a pro-Palestine demonstration at the University of Texas at Austin. Getty Images -
Students rally at the University of Texas at Austin, where police arrested scores of protesters. Getty images -
Mounted police confront students protesting against the war in Gaza, at the University of Texas at Austin. Getty Images -
Pro-Palestine demonstrators argue with University of Southern California officials, who attempted to take down an encampment set up in support of Gaza, at the institution in Los Angeles. Getty images -
University of Southern California police officers detain a pro-Palestine demonstrator. Getty Images -
University of Southern California officers dismantle protesters' tents. EPA -
Police stand guard at an entrance to Columbia University, in New York City, where students continue to protest in support of Palestinians, amid the war in Gaza. Reuters -
Najla Said, daughter of Palestinian-American academic and literary critic Edward Said, and Motaz Azaiza, a Palestinian photojournalist from Gaza, join the Gaza solidarity encampment at Columbia University. Photo: Columbia Students for Justice in Palestine -
As the campus protests continue, Columbia has moved its classes online. AFP -
Workers erect a wooden barrier at New York University Stern School of Business after an encampment set up by students was cleared out on Monday night. Getty Images -
Massachusetts Institute of Technology student Isa Liggans, front left, takes part in Muslim prayer with others, at an encampment of tents at the college, in Cambridge, Massachusetts. AP -
Police officers disperse pro-Palestinian students and protesters who set up an encampment on the campus of New York University. AFP -
A protester outside New York University. Reuters -
Pro-Palestinian protesters gather in front of Sproul Hall on the campus of the University of California, Berkeley. AP -
Pro-Israeli demonstrators chant 'shame' after Columbia University assistant professor Shai Davidai was denied access to the main campus. AP -
A tent used by pro-Palestinian demonstrators at MIT. Bloomberg -
A coalition of University of Michigan students rally to pressure the university to divest its endowment from companies that support Israel. Reuters -
A sign at the University of Michigan. Reuters -
A pro-Palestinian protester in front of Sproul Hall in Berkeley, California. Getty Images / AP -
Police officers detain pro-Palestinian students and protesters at New York University. AFP -
Police in Riot gear stand guard as demonstrators chant slogans outside the Columbia University campus. AP -
Pro-Palestinian students and activists protest against the Israel-Gaza war on the campus of New York University. AFP
Qatar, one of the world’s largest liquefied natural gas exporters, has mediated heavily between Hamas and Israel throughout the current conflict.
Negotiations to secure at least a pause in hostilities have been deadlocked for months, with the opposing sides far apart on elements such as the status of Israeli troops in Gaza, as well as the terms surrounding the release of Palestinian detainees and Hamas-held hostages.
Meanwhile, Saudi Arabia, the Arab world’s largest economy, plans to scale back some of the projects being developed under its ambitious Vision 2030 programme, key to the kingdom’s efforts to diversify its economy and reduce reliance on crude exports.
During the same panel session, Saudi Finance Minister Mohammed Al Jadaan said: “When we started, we did not have Covid. We did not have inflation [as well as] incredibly high interest rates around the world and cost of funding."
In response to a query about Saudi Arabia’s ability to fund large-scale projects amid lower oil prices, Mr Al Jadaan said the kingdom has been “conservative” in its economic projections.
“We have been actually very conservative in our assumptions when it comes to our oil revenue,” he said.
The kingdom closed 2023 with oil revenue higher than projected at the beginning of the year, despite a drop in crude prices and production, Mr Al Jadaan said.
“[This] basically tells you that we are not optimists when it comes to projecting and therefore committing our spend to what the revenue is. We are very conservative,” he added.
Saudi Arabia's economy contracted in the first quarter of this year on the back of a slump in the oil sector, despite an expansion in non-oil activities during the period.
The kingdom's real gross domestic product contracted by 1.8 per cent annually in the January-March period, according to flash estimates released by the General Authority for Statistics this month.
Investing in AI
Qatar Investment Authority (QIA), the Gulf country’s sovereign wealth fund, will continue investing in data centres, data categorisation, software applications linked to artificial intelligence and chipmakers, but the “winner is not very clear” in these sectors, its chief executive Mansoor Al Mahmoud said.
Speaking in a separate session, Mr Al Mahmoud said AI technology was still in its infancy despite generating a lot of interest.
“The good aspect of AI technology is that all the stakeholders are in agreement to invest more into the space,” he said. "You have investors like us [and] you have the policymakers [who] are keen to attract businesses and investment into this space."
On Monday, QIA announced it would anchor an investment commitment in Ardian Semiconductor, a fund established by French private equity investment company Ardian. The financial value of the deal was not disclosed.
The QIA is estimated to have about $475 billion of assets under management, making it one of the world's largest sovereign wealth funds, according to the Sovereign Wealth Fund Institute.
Meanwhile, Canada’s Brookfield Asset Management is investing $10 billion to $12 billion to build 10.5 gigawatts of renewable energy for Microsoft over the next five years, Bruce Flatt, the investment firm’s chief, said during the same session.
The companies signed the agreement this month, which is expected to contribute to Microsoft’s goal of matching all of its electricity consumption with zero-carbon energy purchases by 2030.
“In most countries of the world, the cheapest cost of bulk electricity is solar or wind and that's dramatically changed from 10 years ago,” Mr Flatt said.
“As a result of that, there's going to be, over the next 20 years, a very significant build-out of renewables in the tens of trillions, [which] will decarbonise the world and the technology companies are leading the way."
